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  "docSlug": "c54d9b8bb206",
  "documentTitle": "Verint Systems, Inc. (VRNT)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-05-23 00:00:00",
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  "notes": "Uses a combination of CEO quote, historical stock performance, and sales growth data to highlight a pattern of M&A failure.",
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      "kind": "callout",
      "text": "Did the stock run up starting in Jan 2014 because investors assumed that the initial post-acquisition sales growth was mostly organic? Are investors making the same mistake today?",
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      "kind": "callout",
      "text": "Translation: “We acquired KANA for the cross-selling opportunities, and we couldn’t cross-sell.”",
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      "text": "Stock Price Growth Historically Follows Sizable Acquisitions",
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      "kind": "metric",
      "text": "Quarterly Non-GAAP Sales Growth (YoY)",
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      "kind": "paragraph",
      "text": "Prior to its most recent round of adding “tuck-in acquisitions,” management’s last large deal involved the acquisition of KANA Software, Inc. from Accel-KKR for $514M in Jan 2014 – just four years after Accel-KKR purchased the business for only $41M.",
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      "kind": "quote",
      "text": "“And the strategy was land and expand... We acquired KANA and we got their customer base. So we saw a great opportunity to land and expand within the customer base... And it actually worked very well for us last year...\"",
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      "text": "And the strategy was land and expand, we discussed the fact that we have a very broad portfolio of better-breed solutions, and we also have a large customer base. We acquired KANA and we got their customer base. So we saw a great opportunity to land and expand within the customer base and as well as new customers. And it actually worked very well for us last year where we achieved double-digit organic growth as we were executing on this land-and-expand strategy last year....What became clear to us now after a couple of quarters of looking at the trends is that while our customers are very interested in working with vendors that have a broad portfolio and moving faster towards transformation, the approval cycle does take longer, and when they approach management, they need to go back and defend the proposal and go through a long explanation and so forth. — Dan Bodner, CEO, Verint",
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      "text": "Source: VRNT SEC Filings, Bloomberg",
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      "kind": "title",
      "text": "An Unflattering M&A Track Record",
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      "arcName": "Overcoming the Monster",
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